UK manufacturing PMI hits 3-month lows at 54.0 in July, misses estimates

The manufacturing sector activity in the UK economy slowed down its pace of growth in the month of July and missed the consensus forecast, the latest data from Markit revealed on Wednesday.

The manufacturing Purchasing Managers' Index (PMI) in the UK arrived at 54.0  points in July, as compared to a previous 54.3 (revised down from 54.4) reading. Markets had predicted the PMI to tick lower to 54.2.

Key Points:                

Weaker increases in both output and new orders.

Intermediate goods production falls for the first time in two years.

Rob Dobson of Markit commented in the release, “UK manufacturing started the third quarter on a softer footing, with rates of expansion in output and new orders losing steam. The upturn in the sector has eased noticeably since the back-end of 2017, meaning that manufacturing has failed to provide any meaningful boost to headline GDP growth through the year-so-far.”

“The July survey data also shows that the performance of the sector is becoming more uneven, with solid output growth in the investment goods industry being largely offset by intermediate goods production contracting for the first time in two years. As the intermediate goods sector supplies other manufacturers, taken alongside the weaker growth of total new orders and a drop in business confidence to a 21-month low, this all suggests the industry is unlikely to exit this soft patch in the near future. “